People expecting collateral for all loans

[heavycar]

What a business to be in, zero risk for the person lending out money, is completely backwards to the real world.  Most loans and credit is given without collateral.  People can ask what they want but lenders usually have a risk.

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[Steamtyme]

You are delusional. The only people giving out loans as you describe operate out of a booth in the back of a bar, and the collateral is your continued good health. Lending isn't a charity, it's a service. Considering people expect interest rates below 3% generally a lender could see their entire earnings wiped out if 1 deal out of 33 goes bad. Hard to understand why they want you to put something of value up before lending you anything. They really are doing people a favor in the end by allowing them to not liquidate their collateral - usually coins people are hoping will appreciate in value - and still receive the funds they need at that time. Then here's where the risk still comes into play; what if the coin/token tanks and the lender is unable to recoup their entire principal.

The loans and credit given irl are tied to you through banking and government documentation. You may not realize it but the collateral in those cases is your Fiat financial future, don't kid yourself. Seeing as you like the business model so much you should jump into lending, maybe even no-collateral loans seeing as you see the need. I will point out there are some already offering this service to those they feel comfortable lending to.

[mk4]

So.. do you really expect people online to be giving out non-collateralized loans to random anonymous strangers on the internet? Maybe, just maybe, people would run away with the money? Try listening to what you're saying here. If you want a loan without collateral, then yea you said it yourself. Get a credit card or borrow from your relatives.

[leowonderful]

Last time I checked there were still people offering loans to trusted and higher rank members on this forum without collateral in the Lending section, though I would agree that requiring collateral for some loans is necessary considering this is an online forum with semi-anonymous posters anyways- different to what it's like in the real world. Just doesn't make sense to offer collateral-less loans to everybody when someone could just take the loan and run as a person with less reputation here.

[pooya87]

Most loans and credit is given without collateral.

"most"?
i don't even know of a single case of a loan that is given without a collateral or at least some sort of guarantee for the lender to get his money back. i would love to take such a loan without collateral if you know, let us know with an example
also you seem to be forgetting that "bitcoin" loans that you see all over the forum and in other websites are irreversible money transfers to someone anonymous online. they can not even work without a solid collateral!

[TheUltraElite]

What a business to be in, zero risk for the person lending out money, is completely backwards to the real world.  Most loans and credit is given without collateral.  People can ask what they want but lenders usually have a risk.

If you think like that, why dont you send out some of your cash to people you think would return them to you with x% interest per month and then observe how many actually return that money to you.

Dont compare lending to an investment banker investment here. The latter does have some guarantee and legal procedure in case of default. Come to this forum and reddit where people give out p2p loans there is no legal basis on which a defaulted loan may get sought after and thus people can just come to the forum with new accounts and as per your judgement should be given out free money by lenders only to get scammed.

If you still dont understand what the people in this thread have tried to say, then you need to seek professional advice because you are delusional and need treatment.

[CryptopreneurBrainboss]

Is completely backwards to the real world, Most loans and credit is given without collateral.

Actually in the real world, loans are only given to people who don't technically need a loan. You can't apply for a loan without having a valid collateral worth more than the actual loan you intend requesting. On the other hand, although the lending business on the forum is no charity with just 120% worth collateral, you can easily get a loan faster than you can get a loan in the real world.

[LeGaulois]

If you have nothing to reassure the lender, then he won't be inclined to lend you money. And you'll do the same with others.
When you borrow money from a bank, you are forced to subscribe to insurance in case you can no longer pay. This is the collateral for banks. I say "forced" because you're really forced, especially for large loans (i.e. when you want to buy a house)

There is also a 'Mortgage law', it's simple you stop to pay they take your house.
But in most cases the collateral is your future income, they will be the first to suck it. And in case you disagree, a justice court will show you another way.

Last time I checked there were still people offering loans to trusted and higher rank members on this forum without collateral in the Lending section, though I would agree that requiring collateral for some loans is necessary considering this is an online forum with semi-anonymous posters anyways- different to what it's like in the real world. Just doesn't make sense to offer collateral-less loans to everybody when someone could just take the loan and run as a person with less reputation here.

It's based on their due diligence and consider the risk/reward ratio. If it didn't make sense they wouldn't do it. Banks can't take such risks.

Is completely backwards to the real world, Most loans and credit is given without collateral.

Actually in the real world, loans are only given to people who don't technically need a loan. You can't apply for a loan without having a valid collateral worth more than the actual loan you intend requesting. On the other hand, although the lending business on the forum is no charity with just 120% worth collateral, you can easily get a loan faster than you can get a loan in the real world.

Would you lend money irl to someone you have never see before? Without collateral? Let's be honest, no. (And me too)

[gentlemand]

Kudos to OP for at least not starting its career here by demanding a no collateral loan. Usually they wade straight in and get some nice red marks.

The purpose of the lending section appears to be for more senior members to sneer at the pitiful attempts to have their money away. I do not understand why it exists.

[stomachgrowls]

What a business to be in, zero risk for the person lending out money, is completely backwards to the real world.  Most loans and credit is given without collateral.  People can ask what they want but lenders usually have a risk.

Lending business is one of the most risky business actually and i dont really believe on the word zero-risk.So lets talk about that taking loans and credit without collateral.

It does depend on an institution or individual if they do ask it out but to know that before you can able to borrow money on traditional ways even without collateral,you have
given all of your personal informations which is enough to track you down incase you wont repay your debt.It might not be too strict but it would be enough for you to put up in prison.

[Findingnemo]

 Most loans and credit is given without collateral.  

Any banks or finance companies will never give loans to a homeless person or who don't have any asset.So they are also giving loans based on your capability of returning it or they will seize your assets based on how they gave loan to you.

[shield132]

What a business to be in, zero risk for the person lending out money, is completely backwards to the real world.  Most loans and credit is given without collateral.  People can ask what they want but lenders usually have a risk.

Most loans and credits are given without collateral? From where do you post? Well, you can get some small money without collateral but at least you need your IDs to send lenders and they have right to blackout you if you don't pay back and believe me this is the worst thing because this way you lose every chance of getting loan from financial institutes in your life.
On anothet hand people on forum ask for collateral and that's logical, do I know who you are? No, so you too.

[heavycar]

Kudos to OP for at least not starting its career here by demanding a no collateral loan. Usually they wade straight in and get some nice red marks.

The purpose of the lending section appears to be for more senior members to sneer at the pitiful attempts to have their money away. I do not understand why it exists.

lol ya, I don't need a loan.  I just find it funny there are lenders here that only give out loans with 120% collateral which means they have zero risk in a traditionally risky business.  I would lend out money all day if people always had 120 percent collateral provided, lol.

[DarkStar_]

Kudos to OP for at least not starting its career here by demanding a no collateral loan. Usually they wade straight in and get some nice red marks.

The purpose of the lending section appears to be for more senior members to sneer at the pitiful attempts to have their money away. I do not understand why it exists.

lol ya, I don't need a loan.  I just find it funny there are lenders here that only give out loans with 120% collateral which means they have zero risk in a traditionally risky business.  I would lend out money all day if people always had 120 percent collateral provided, lol.

So why not come compete? Charge a significantly lower rate since it's "zero risk" and walk about with easy profits. Nothing stopping you.

There is some risk though. If you keep altcoins in local wallets, the coin could crash overnight and you'd be taking losses. If you keep altcoins on exchanges, you'd face risks from the exchange shutting down/disappearing/blocking withdraws/etc, and possibly have to suffer losses if the borrower added more collateral but you never adjusted your stop loss.

[Thirdspace]

What a business to be in, zero risk for the person lending out money, is completely backwards to the real world.  Most loans and credit is given without collateral.  People can ask what they want but lenders usually have a risk.

in real world, lender meets borrower face to face then lender asks for ID and does background check
they can find you if you decide not to repay the loan, and they can do a few things backed up by law
in crypto, we all use pseudonyms... without faces, IDs can be faked, there are no guarantees for real personal data
if the borrower runs away, the lender can't do anything... can't find your whereabouts

[heavycar]

Kudos to OP for at least not starting its career here by demanding a no collateral loan. Usually they wade straight in and get some nice red marks.

The purpose of the lending section appears to be for more senior members to sneer at the pitiful attempts to have their money away. I do not understand why it exists.

lol ya, I don't need a loan.  I just find it funny there are lenders here that only give out loans with 120% collateral which means they have zero risk in a traditionally risky business.  I would lend out money all day if people always had 120 percent collateral provided, lol.

So why not come compete? Charge a significantly lower rate since it's "zero risk" and walk about with easy profits. Nothing stopping you.

There is some risk though. If you keep altcoins in local wallets, the coin could crash overnight and you'd be taking losses. If you keep altcoins on exchanges, you'd face risks from the exchange shutting down/disappearing/blocking withdraws/etc, and possibly have to suffer losses if the borrower added more collateral but you never adjusted your stop loss.

Thats a fair point, if you have a stop loss set up on an exchange there could be some major slippage or the exchange could pull an exit scam.

[eternalgloom]

You know where you can get no-collateral loans pretty easily, on Reddit actually, in the /r/borrow sub.
Once in a while you also read stories from people who've literally lost thousands of dollars, because they lent to people who they trusted previously.

Happens pretty often and that's the reason why we ask for collateral here.
Too many people were getting scammed, before asking for collateral became standard.

[dothebeats]

Trust is entirely out of the equation in lending with crypto, so your arguments do not apply here. Sure if you can get a no-collateral loan with banks then do it, but here in crypto? No one will ever lend you anything if you present nothing as collateral, unless you have already build up rep and proved time and time again that you have the money to return what was borrowed based on your terms with the lender. I'd rather ask for a loan with a collateral than a no-collateral loan with high interest rates anytime of the day, or perhaps that's just me.

[timerland]

What a business to be in, zero risk for the person lending out money, is completely backwards to the real world.  Most loans and credit is given without collateral.  People can ask what they want but lenders usually have a risk.

Your biggest problem here is when you are comparing the real world with the online world. In the real world, when a bank or other entity gives you a loan, they are able to see your ID, your address, your credit score, and all the information on them. Online, you know nothing. Fake ID's are fairly cheap and easy to get, and people are more able to get away with scamming online.

Also, with collateral, you get a lower interest rate compared to without collateral. Getting a loan IRL from the banks is more expensive then collateral loans in crypto.

If you do want to put this into a more similar situation, lending online with no collateral would be finding someone on the street, having a 20-minute conversation with him and then giving him a loan.

[Japinat]

There is a lender board in this forum but lenders would give loans without collateral to a newbie.
Actually even in real life, lenders always sees the risk so they would also require a collateral when you borrow from them.

There are non collateral loans both online and in real world and you can avail that if you have a good reputation or you are a good payor in your previous loans but that still belongs to unsecured loans, hence risk is really high.

One can only become successful in this kind of venture if he knows how to manage the risk in lending money.
No risk for borrowers as they can run away and lender would not go after them if the amount involve is pretty low.